February 22, 2005 - Budget Cuts on Housing for Disabled

The Bush administration is quietly proposing to stop financing the construction of new housing for the mentally ill and physically handicapped as part of a 50 percent cut in its housing budget for people with disabilities.

The proposal, which has been overshadowed by the administration's plans to shrink its community development programs, affects what is known as the Section 811 program. Since 1998, Section 811 has helped nonprofit developers produce more than 11,000 units of housing for low-income people with disabilities.

The proposal echoes public poly of decades ago when the federal government retreated from building public housing in favor of providing vouchers under programs like Section 8, which allows poor tenants to redeem those vouchers with private landlords.

This time, the federal government would discontinue financing housing for people with spinal cord injuries or psychiatric illnesses who are not necessarily homeless but may live in nursing homes or psychiatric hospitals.

Under the 2006 budget proposal, the capital allocation would be eliminated and the overall budget would shrink by a little less than half, to $120 million from $238 million.

By relying exclusively on vouchers, the federal government would essentially be lumping these people with able-bodied Section 8 recipients in competing for some of the same apartments.

Section 811 has existed for three decades, first as part of the Section 202 program for the elderly, and then, starting in the 1990's, as its own program. Since 1998, HUD has awarded $83 million to New York State, out of $1 billion nationwide, to nonprofits, according to the Technical Assistance Collaborative, a national advocacy group.